Warburg, Merrill bolster insurance platform

The two firms have each written $350m cheques to help Aeolus Re, a Bermuda-based reinsurance company, increase its capital to more than $1bn.

New York-based private equity firm Warburg Pincus and New York-based Merrill Lynch Global Private Equity, the private equity branch of wealth management and advisory company Merrill Lynch, have led an investment in Aeolus Re, a Bermuda-based reinsurance company that focuses on the catastrophe segment of the reinsurance industry, Aeolus said in a statement.

Warburg Pincus and Merrill Lynch each invested $350 million (€267.6 million), helped to bring Aeolus’s capital base to more than $1 billion

Other investors who have committed extra capital to Aeolus include the company’s founders, Peter Appel and David Eklund, as well as Arch Reinsurance, an American reinsurance provider that is a subsidiary of Arch Capital Group, a Bermuda-based insurance and reinsurance writer. Like Warburg Pincus, Arch Reinsurance was an initial investor in Aeolus and which increased its commitment to $50 million, the statement said.

Banc of America Capital Investors and Wachovia Capital Partners also took part in the investment.

Appel, Aeolus’s chairman and chief executive officer, and Eklund, the company’s chairman, established Aeolus Re in July of 2006. Warburg Pincus led the founding with a $500 million commitment.